Will this marriage work?

Published 4:00 am, Wednesday, September 5, 2001

HEWLETT-PACKARD'S acquisition of Compaq is taking place in the financial emergency room as much as the corporate boardroom. Stock prices for both firms stand at yearly lows, recent layoffs total 17,500, and each company is scrambling to overcome weak personal computer sales in a slowing economy.

Pooling forces makes sense, given their joint predicament. If the merger passes antitrust inspection, the new entity could build on the low-margin laptops and printers to capture the high-margin computer services and server sectors.

Though the deal totals $25 billion in value, this is not a bidding war for an industry prize. In the reeling high-tech world, it's a marriage of decidedly weak competitors looking to stay alive. Neither company could afford to stand alone much longer. But the bold deal also captures another element of technology: an infinite ability to adjust, innovate and move forward.

The combined company instantly rivals IBM, the famed Big Blue pioneer that nearly expired before it reinvented itself over the past decade. The enlarged Hewlett-Packard has a long path upward, but it could likewise become a new force in a fast-changing market.